Egypt took part in the Ninth Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) held on 4 to 6 September in the Chinese capital Beijing.

The tri-annual meeting saw Egypt sign a handful of agreements. According to Yahya ElWathik, head of the Egyptian commercial service, the agreements signed during the FOCAC summit marked a significant step towards boosting Chinese investments in Egypt.

These contracts, valued at over $1 billion, encompassed various sectors, including chemical and food industries, bromine production, and the manufacture of components for solar cell glass. These projects, with their potential to generate substantial economic activity, create thousands of job opportunities, and enhance Egypt’s industrial capabilities, offer a promising outlook for Egypt’s economic future, ElWathik stressed.

In addition, Prime Minister Mustafa Madbouli, who attended on behalf of President Abdel-Fattah Al-Sisi, witnessed the signing of five memoranda of understanding (MoUs) to establish three factories for manufacturing fibre optic cables and communications equipment, as well as building three centres for exporting outsourcing services in the fields of electronic circuit design, software development, optical networks, green transformation technology and semiconductors, the State Information Service said.

The MoUs also include the establishment of a technology investment fund worth $300 million, a data centre, and four centres, and laboratories to train and build the capacities of more than 3,250 specialists.

Moreover, said ElWathik, during FOCAC several Chinese companies expressed keen interest in investing in Egypt, particularly in renewable energy, automotive manufacturing, and telecommunications. Fruitful discussions were held with representatives from Henan Investment Group, ZTE Corporation, and Great Wall Motors (GWM) to explore potential collaborations. “The agreements reflect Egypt’s position as an attractive investment destination for Chinese companies,” he said. The projects in the Suez Canal Economic Zone, such as the glass production factory and other production facilities, highlight the zone’s potential as a hub for industrial development and trade. Furthermore, he said, Egypt’s economic and commercial offices in China are actively promoting investment opportunities in Egypt to Chinese investors, showcasing the government’s proactive measures to create a business-friendly environment and its commitment to improving regulatory reforms and enhancing infrastructure.

The Chinese investments align with Egypt’s economic priorities, said Sherif Fahmy, CEO of the N Gage Group, who added that the International Monetary Fund’s (IMF) third review of Egypt’s loan programme had emphasised the importance of sustainable foreign direct investment (FDI), industrial growth, and reducing external imbalances.

The Chinese investments address these areas by providing the necessary capital and expertise to stimulate local industries, reduce the need for imports, and enhance Egypt’s export potential, Fahmy said.

The General Authority for Investment and Free Zones (GAFI) plays a significant role in facilitating these investments, he said, and the GAFI’s recent hosting of Chinese delegations to Egypt demonstrates its commitment to turning joint investment plans into tangible projects, especially in priority sectors like textiles, renewable energy, and electric vehicles.

Fahmy said that in the communications sector Chinese firms such as Huawei are key players in developing Egypt’s 5G network, an essential component of the country’s digital transformation and smart city initiatives, for example.

In the automotives sector, Chinese investments in electric-vehicle (EV) assembly plants are pivotal for the country’s push towards sustainable transportation, Fahmy added. This supports Egypt’s environmental goals of reducing carbon emissions while also positioning the country as a leader in Africa’s emerging EV market.

He pointed out that Egypt’s strategic location and participation in the African Continental Free Trade Area (AfCFTA) make it an attractive destination for Chinese automakers.

The energy sector is another area that is attractive to Chinese investors. According to Fahmy, China Energy is accelerating its renewable energy projects in Egypt, focusing on establishing factories and production centres for green hydrogen and ammonia technologies.

With ongoing projects valued at $2 billion and plans to move its North African headquarters to Egypt, the company’s expansion will significantly boost the renewable energy sector. In addition to enhancing energy infrastructure, China Energy’s MoU with Egypt’s Ministry of Electricity for a 2GW hydroelectric energy storage system and its $6.75 billion agreement with the SCZone to develop a green hydrogen plant will contribute to Egypt’s sustainability goals under the country’s Vision 2030 strategy.

Besides the sectors which have already attracted investments, Fahmy believes there are several others that are ripe for further Chinese investment but are currently not being sufficiently promoted. Among these, the biotechnology and pharmaceuticals sectors stand out due to their potential to significantly advance Egypt’s capabilities in healthcare innovation and manufacturing.

With China’s advanced biotechnological tools and pharmaceutical practices to draw on, there is a significant opportunity to enhance both medical research and the production capabilities of Egypt’s growing healthcare industry, he said.

The tourism sector also offers substantial opportunities for investment. Egypt’s Vision 2030 includes plans to enhance and expand the tourism sector. It aligns with increasing global interest from markets like China, whose tourists are known for their appreciation of cultural and historical destinations.

Developing this sector could help Egypt capitalise on the growing outbound tourism from China, further boosting its tourism revenues and contributing to its economic diversification goals, Fahmy added.

The establishment of more Technical and Vocational Education and Training (TVET) schools would also enhance education and training, aligning workforce skills with the demands of a modernising economy.

Another promising area for further Chinese investment is technology hardware and semiconductor manufacturing, Fahmy said, especially with the rising global demand for advanced technologies such as artificial intelligence (AI) and machine learning.

By engaging with the FOCAC, Egypt is leveraging the economic growth engine that China represents and positioning itself as a crucial gateway between Africa and global markets, he said. He added that the Suez Economic and Trade Cooperation (SETC) Zone, a key achievement in Egypt-China relations, showcases how Egypt is attracting significant Chinese investment in sectors like manufacturing, technology, and infrastructure.

On the diplomatic front, Fahmy added, Egypt’s participation in the FOCAC solidifies its influence within Africa while strengthening its longstanding relationship with China. “As the first African country to establish diplomatic ties with China, Egypt has continuously contributed to key China-Africa initiatives, reinforcing its leadership in shaping continental agendas,” he said.

For China, the FOCAC aligns with the objectives of its Belt and Road Initiative (BRI), a global development strategy adopted by the Chinese government to build infrastructure and broaden trade links across Asia, Europe, and Africa. Through the FOCAC, China not only expands its access to vital African resources, but also fosters markets for Chinese goods, which are critical aspects of its broader global strategic ambitions, Fahmy said.

This engagement is crucial for bolstering China’s international investments and reinforcing its economic ties with Africa. Additionally, the forum enables China to demonstrate its commitment to South-South cooperation, positioning itself as a significant leader in global development.

For African nations, the FOCAC serves as a crucial platform for engaging with China on multiple developmental, economic, and strategic levels, Fahmy said. Chinese President Xi Jinping has pledged $51 billion to support 30 infrastructure projects across the continent, and this financial assistance underscores the depth of China’s commitment to aiding Africa’s development trajectory, ensuring that the continent’s infrastructure is robust enough to support sustainable growth and increased intercontinental trade.

Moreover, the FOCAC provides African states with a collective bargaining platform to enhance trade relationships and attract investments into key sectors, Fahmy said.

Obi Emekekwue, president and CEO of DelReeve Konsult Limited, a Nigerian communications and business advisory company, said the FOCAC presents a great opportunity for mutually beneficial engagement between China and Africa.

As China becomes a stronger global player, the gathering allows it to expand and consolidate its sphere of influence to better compete with and counter other global powers. A forum like the FOCAC enables China to present itself and to explain its policies to African governments and to build stronger understanding, Emekekwue said.

Moreover, as China has emerged as the world’s manufacturing hub, it has become important for the country to create markets where manufactured goods can be sold, he added. “Even though Africa currently accounts for a small proportion of world trade, the fact remains that the African market is growing,” he added.

China has emerged as a strong development partner for Africa, Emekekwue said. In addition to being a market for most of the natural resources coming out of the continent, China has also delivered unprecedented infrastructure to its countries. It has also provided financing that has enabled many African countries to meet their domestic and international obligations, he pointed out.

However, the African nations must realise that in international relations there is no free lunch, he said. Each country is trying to advance its strategic interests, and China is no different in this regard. The African nations must, therefore, be clear about their own strategic national interests and must keep these in mind in any discussion and engagement during such gatherings, Emekekwue stressed.

“They should only enter into agreements where interests align and where the outcome will be the advancement of identified national objectives. They have an obligation to scrutinise all engagements to ensure that they are not one-sided and do not put the African countries at a disadvantage,” he said.

---

* A version of this article appears in print in the 12 September, 2024 edition of Al-Ahram Weekly